Lord Stunell
Main Page: Lord Stunell (Liberal Democrat - Life peer)Housing and Planning Bill
Lord Stunell Excerpts
Lord Kerslake
My Lords, I support the amendment of the noble Lord, Lord Best. I will also speak to Amendment 81A, which I supported, and 81B, which I put forward and lead on. These amendments go to the fundamental question for local authorities of whether the costs they will incur will be properly recognised within the arrangements. As has been well put by the noble Lord, Lord Best, in some instances the costs may make the whole policy not worth putting in. In fact, we may find—depending on the outcome of all this—that the costs will raise a question about the whole policy. However, at the very least, in different housing markets it most certainly will raise questions. Therefore, it is absolutely right to say that in circumstances where it clearly does not make sense to implement the policy in terms of costs and benefits, there is provision to not proceed with it.
The other two amendments seek to be very clear that administrative costs will be covered. I speak specifically to Amendment 81B. Within the draft Bill, it says the Minister “may provide for deductions” to cover costs. In other words, it is a permissive choice for Ministers whether or not they make these deductions. It seems inconsistent with the intent of Government and therefore the amendment does something very simple, which is to change the “may” to a “must”, to put it beyond doubt that, as this is a government policy which local authorities are being asked to implement, they must properly provide for the costs of implementing that policy.
This is the key. First, in order to access the information about incomes, the net has to be cast wide—effectively ask all tenants to secure information about less than 10% of the tenants. That is the first point. Secondly, if this is operated in a fair way there will be complexity. There is no doubt about that. The noble Baroness, Lady Hollis, very precisely pointed to one of the issues of fairness: if people’s income changes, in the interest of administrative simplicity you might say, “We won’t change the rent”, but that would be extraordinarily unfair if people have lost jobs or changed roles and their income has changed significantly.
As we know, in the labour market that we work in, people can see their incomes as householders change very rapidly indeed—from one week to the next, as I said earlier. Therefore, you have complexity. You have complexity about the different benefits within the system, about the makeup of families, and about how you assess who the higher earners are within those families. With that complexity comes cost. It is an absolutely logical consequence of seeking to introduce a fair system.
Lord Stunell (LD)
Does the noble Lord agree that with complexity also comes error? Some of us who, when at the other end of the building, spent a lot of time helping constituents deal with housing benefit queries and difficulties are well aware of the delays and problems in that system and foresee something at least comparable when this system is brought into play.
Lord Kerslake
The noble Lord makes a very powerful point. With any new system—or indeed with very mature systems, such as housing benefit—there are huge risks of error and cost in correcting it. I have run a housing benefit system and know just how easy it is to run into difficulties with it. I also know how costly it is to run because of the complexity of individual circumstances. We are here creating a whole new parallel system of assessment that sits alongside those for universal credit, housing benefit and so on. It will be new, and we will not establish a lot of the detail until we have run it. That, by the way, is why I still feel strongly that a pilot to test the operation of the system would be very valuable, not least because it would tell us how much cost is involved and what are the potential error rates.
It is essential, first, that we recognise that this may not be worth doing nationally, and certainly not locally. Secondly, we must give comfort in the Bill to local authorities that their costs will be covered. Thirdly, we must recognise that if this is to be a genuinely fair system, it will come with complexity and significant cost.
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, I support Amendment 75A, to which my noble friend Lord Stoneham has added his name, and Amendment 81A, to which I have added my name. Earlier, we debated at great length the cost to local authorities of administering pay to stay. The system appears disproportionately bureaucratic and, as we are uncertain how implementation will work, it will be extremely costly to sort out.
Housing, revenue and benefits officers are already working to full capacity. I have yet to ask the officers on my council just how many more of them they think they will need to administer this system. As we have heard, the absence of any detail means that no one can be sure that the additional rental income will cover the cost of administration. Local authorities should not be out of pocket. There is very little detail on the scheme and no transparency, and it seems that the Government are just transferring costs to local authorities.
On market rents, we have heard that there will be a flat rate of income. When tenants reach that rate, they will be assessed to pay market rents on a sliding scale. However, we have not heard anything about whether the taper will stop at a lower or higher level of rent. Will the market rent be assessed local authority by local authority, or will it be a flat rate? The Secretary of State has yet to tell us. Will tenants paying additional rent on the taper in the north stop paying at a lower level than those in the south-east, where the taper may carry on for some time, because market rents are much higher?
It is not surprising that local authorities are gaining the impression that the Government do not value them or the contribution that they make to their areas. I am very disappointed that we have so little detail at this stage on this very important clause, and I support the amendments.
Lord Stunell
My noble friend has raised an extremely important point relating to market value assessment. I wonder whether the Minister would like to comment on the fact that the DWP has market rents determined for housing benefit purposes, which is a hotly contested topic in many areas. Perhaps she would let us know whether that is indeed the benchmark that is intended to be used.
Lord Campbell-Savours
My Lords, the noble Lord, Lord Best, referred to an authority—I did not know whether it was a mythical authority or a real one that he was not prepared to identify. I can tell him that in the county of Cumbria, there are a number of authorities that would fall within the basic case that he was making: certainly Carlisle District Council; Barrow-in-Furness; probably Copeland, which is in Whitehaven; and, apart from the lakeland part of the districts concerned, certainly Allerdale.
When I asked councillors in Cumbria the other day what the level of rent was in the private sector of houses that had been sold off, I was told that there was very little difference—a marginal difference—maybe a fiver or a tenner on a property. So what are the costs to be incurred? The Bristol brief, which I assume everyone has received, goes into a little more detail. It says that even though very little detail is given in the Housing and Planning Bill, as a minimum the scheme would have to include income verification, data matching, measures to discourage and combat fraud, dealing with inquiries, market rent setting, rent accounting, audit processes for the additional rent raised and processes for internal and external review. That does not include appeals and overpayment recovery. There is an additional factor: investigation. We know that the departments concerned with the benefits system have investigators, which cost money. I am presuming that local authorities, particularly where they have substantial housing stock, if they are to meet the Government’s targets on these matters, will have to employ people to carry out this work. These all add to the administrative costs of implementing the scheme in areas where the differences between the private sector rent of a former local authority property and the local authority rent are only marginal.
That leads me to the view that the Minister should very seriously consider Amendment 75A, because it at least allows local authorities to have in mind what those costs would be and whether they should not proceed to pursue people in the circumstances that will arise.
Baroness Evans of Bowes Park
I will have to take that away and write to the noble Lord.
Lord Stunell
I thank the noble Baroness for what she said about taking serious note of the possibility that in some areas there is not a viable level of market rent to support action, and I urge her to take that back to the department and think it through carefully. Clearly quite an important consideration is the calculation of the market rent in a particular area. As I mentioned in my attempted intervention a few minutes ago, at the moment there is a Department for Work and Pensions assessment of market rent for the purposes of the payment of housing benefit, which I believe is something like the lowest quartile of the property available in the local reference area. Certainly, that causes real difficulties in some areas such as my own in Greater Manchester that have higher local market rents. That illustrates a problem I think the department will have in assessing this. If the ceiling were taken at the DWP level it would mean that plenty of areas would not be as viable as they might be if a higher level were taken. Correspondingly, if a higher level is taken you will have the paradox of those on housing benefit being limited to one market value in the area and those who are paying higher rents as a result of this being judged by a different market level in the same area. I just want to alert the Minister to some of the problems that could lie ahead, certainly in my own borough of Stockport and, no doubt, in many other places as well.
Baroness Hollis of Heigham
I want to follow up my noble friend’s well-spotted point that I had not picked up on. Clause 84(5) says:
“The regulations may provide for assumptions to be made in making a calculation, whether or not those assumptions are, or are likely to be, borne out by events”.
Likely to be borne out by events? Can I just ask the Minister a very simple question which I think might allay our fears? If the Government have got it wrong, do they reimburse local authorities?
Lord Stunell
My Lords, I support the amendment tabled by the noble Lord, Lord Kerslake, and the general trend of the other amendments in this group. On this occasion I speak as the Minister who was at the Dispatch Box at the other end of the building when the Localism Bill was going through the House. The flexibility that the noble Lord, Lord Kerslake, has referred to was introduced in that legislation. I was ready to stand at the Dispatch Box and to support the introduction of that flexibility for local authorities, which up until then had not had it.
In the spirit of localism and of taking at the local level decisions that are relevant to local communities, it is quite right that there should be that flexibility for councils. Something approaching 600,000 social homes are “underoccupied” and 400,000 are “overcrowded”—of course, I put both those in inverted commas—and something like 1.2 million families are on the council house waiting lists in this country, so there is clearly not a very good match between the existing housing stock and the needs placed upon it.
I entirely agree with the point that the noble Lord, Lord Bassam, and the noble Baroness, Lady Hollis, have just made about increasing the numbers but I disagree with their critique. I just draw their attention to the fact that up to 1997 1.5 million council houses had been sold off by the Conservative Administration. Between 1997 and 2010 another 421,000 net were sold off by the Labour Government. During the coalition Government, although I would be the first to agree that not enough new social housing provision was made, the fact is that for the first time in something approaching 25 years the net stock of social housing increased. I agree that it did not increase fast enough but the fact is that it increased.
I am very pleased about at least one provision of the Bill, and that is entrenching more firmly the one-for-one replacement policy, and indeed in London going for two for one. The noble Lord, Lord Kerslake, argued very cogently that the mechanics of delivery are not there but the intention is written in. Let us be clear: the question of supply is fundamental but it is also important to understand that other factors come into this as well.
I want to pick up on the point made by the noble Lord, Lord Young of Cookham, that it is time to rebalance things. That is exactly what the Localism Act did: it gave local housing authorities the opportunity to look at the demands and the needs that they and their communities faced and to decide whether they wanted flexibility in tenancy lengths in order to make its use more efficient and their communities more rounded. I believe that that is right.
It is counterproductive to say that everyone has to have a short tenancy. The noble Lord, Lord Young, is being unrealistic in saying that you can have a conversation with someone. I want to know what kind of conversation you have with a widow of 73 about her tenancy; then you have it when she is 78 and then when she is 83. It is preposterous. Clearly in that situation you make sure that the widow of 73 is in appropriately sized accommodation and not in a four-bedroom house that used to have six children in it, and then you say that it is a lifetime tenancy. This does not allow that to happen. It is a serious mistake which does not take account of the demographics.
The amendment of the noble Lord, Lord Bassam, is better than nothing but, again, it does not take account of the different choices which face people at different points in their life. If you are a young mother with two small children, which is quite a common circumstance in which to be allocated a tenancy at the moment, you will not necessarily need an 11-year tenancy and a short tenancy and a review may well be appropriate. However, as I say, if you are a widow of 73 you want a lifetime tenancy.
Yes, we need to increase supply, and the Bill is positive in stating what should happen. Yes, we need a balance, but we have already struck it. Whatever balance or policy we have has to take account of the demographic make-up of the people going into social housing because the length of tenancy that makes any sense will be different for people at different stages in their life experience and cycle.
Lord Campbell-Savours
My Lords, the noble Lord, Lord Young of Cookham, referred to a conversation. The conversation means the review. I go back to what I have said before. My noble friend intervened on me to say that the review to which he was referring was a review carried out by the Government. The Bill is quite clear that the landlord under a fixed-term secure tenancy of a dwelling house must carry out a review to decide what to do at the end of the term. Again I ask: what is in the review? What matters will the local authority have in mind when it is reviewing the tenancy at the end of five years? If Ministers cannot answer me now they can write to us and let us know precisely what they are. The local authorities will be interested.
On the question of increased supply, I go back to the comments of the noble Lord, Lord Young of Cookham. When we talk about supply we do not have to talk exclusively about social tenancies. We can talk about houses that are purchased on the open market. In the town where he lives, Cookham, and in Maidenhead, where I live, builders tell me that you can build in this country a three-bedroom house for £80,000 to £85,000. That same house in Maidenhead or Cookham would be on the market now probably for £350,000 to £400,000. What is the difference? The difference is in the land value. If we were to address the issue of land values within the United Kingdom and bring them down to what they should be we would not have this problem of having to make increased provision of social housing. We would be able to sell people brand new two or three-bedroom houses at sensible and reasonable prices and this Bill, as I have said before, would be unnecessary. The problem is in land values. So when we deal with supply let us look not only at social housing; let us look at the cost of land.